Amid regulatory scrutiny from the Reserve Bank of India (RBI) regarding its associate company, One 97 Communications announced on Friday the approval of discontinuing inter-company agreements with Paytm Payments Bank, aiming to mitigate dependencies. This decision holds significance as Paytm Payments Bank Limited (PPBL) faces scrutiny from the RBI due to persistent non-compliance and ongoing supervisory concerns.
In a regulatory filing on Friday, One 97 Communications, the parent company of Paytm, revealed that both entities have implemented additional measures to bolster the independent operations of Paytm Payments Bank. The move to terminate various inter-company agreements aims to strengthen the autonomy of PPBL, according to the filing. Furthermore, shareholders of PPBL have agreed to streamline the Shareholders Agreement (SHA) to bolster the bank’s governance independently of its shareholders. The decision to terminate agreements and modify the SHA was approved by the One 97 Communications board on March 1, 2024.
Despite these developments, services offered by One 97 Communications, including the Paytm app, Paytm QR, Paytm soundbox, and Paytm Card machines, will continue without disruption, as confirmed in the filing. Earlier, in a regulatory move in January, the RBI restricted PPBL from accepting fresh deposits or top-ups in various customer accounts, wallets, FASTags, and other financial instruments, with a deadline initially set for February 29, later extended to March 15. Subsequently, on Monday, Vijay Shekhar Sharma relinquished his role as part-time non-executive Chairman of Paytm Payments Bank Limited, prompting a reshuffle in the bank’s board, which is now undergoing reconstitution. PPBL has initiated the process of appointing a new Chairman.
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